STOCK MARKET WATCH - Wednesday, 1 February 2012

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46. America is becoming a nation of renters

http://bottomline.msnbc.msn.com/_news/2012/01/31/10280438-america-is-becoming-a-nation-of-renters

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There was fresh data from the government Tuesday showing that the American dream of owning a home is fading fast.

The share of all U.S. privately-owned houses that stood empty fell in the fourth quarter to its lowest since 2006 as the number of houses occupied by renters rose faster than the pace of new vacancies created by homeowners moved out, according to the Commerce Department. There number of housing units occupied by renters rose by 749,000 in the fourth quarter compared to a year earlier; some 91,000 fewer homes were occupied by owners, the data show.

With the fast pace of foreclosures showing no sign of letting up, the U.S. homeownership rate continues to fall. Just 66.0 percent of U.S. homes were occupied by their owners in the fourth quarter of last year – half-a-percentage-point lower than a year earlier. That’s the lowest level of homeownership since the second quarter 1998.

The steady rise in demand for rentals has tightened the supply of housing, helping to push rents higher. Homebuilders report that the market for multi-family units has been a lone bright spot in the overall housing market. While the pace of new household formations has lagged historical averages, those new households are becoming renters. That trend is likely to continue until would-be home buyers gain more confidence that the housing market has bottomed, according to NAHB Chief Economist David Crowe.